Sarheen, Inc. maintains no inventories and has collected the following data on one of its products for the most recent period: Required:
Determine:
1. The direct material usage (quantity) variance.
2. The actual cost of the direct materials purchased and used during the period. (Hint: these two amounts are identical.)
3. The direct material price variance.
4. The correct summary journal entry to record direct material costs for this period's production, including associated standard cost variances. (Note: assume that any price variances are recorded at point of production.)

Question

Sarheen, Inc. maintains no inventories and has collected the following data on one of its products for the most recent period:  Required:
Determine:
1. The direct material usage (quantity) variance.
2. The actual cost of the direct materials purchased and used during the period. (Hint: these two amounts are identical.)
3. The direct material price variance.
4. The correct summary journal entry to record direct material costs for this period's production, including associated standard cost variances. (Note: assume that any price variances are recorded at point of production.)

Quizplus · Accepted Answer

The Answer of Sarheen, Inc. maintains no inventories and has collected the following data on one of its products for the most recent period:  Required:
Determine:
1. The direct material usage (quantity) variance.
2. The actual cost of the direct materials purchased and used during the period. (Hint: these two amounts are identical.)
3. The direct material price variance.
4. The correct summary journal entry to record direct material costs for this period's production, including associated standard cost variances. (Note: assume that any price variances are recorded at point of production.)